Oregon lawmakers are moving forward with a new housing budget that significantly reduces eviction prevention funding while continuing major investments in homeless shelters. The proposal, passed by a legislative subcommittee, is part of House Bill 5011 and would impact the Oregon Housing and Community Services Department’s budget for the next two years, starting July 1, 2025. Under growing financial strain and with less revenue than expected, state leaders are balancing difficult decisions amid rising homelessness, an ongoing housing shortage, and increasing eviction filings.

Major Budget Cuts on the Horizon

The proposed budget would shrink the Oregon Housing and Community Services Department’s two-year budget by between $1 billion and $2.6 billion. The reduction comes as the state faces a $500 million shortfall in expected revenue due to slow economic growth and trade-related issues. These cuts represent a major step back from the budget that Governor Tina Kotek proposed in December. Despite acknowledging lawmakers’ difficult position, the governor’s office expressed disappointment, hoping for more investments before the legislative session ends.

Eviction Prevention Faces Deepest Cuts

One of the hardest-hit areas in the budget is eviction prevention. Only $33.6 million is allocated for programs like rental assistance and legal support, which aim to keep people housed before they become homeless. This is nearly $100 million less than the current budget and far short of the $173.2 million that Governor Kotek had requested. The Oregon Law Center estimates the new funding would help just 4,300 households facing eviction, compared to over 27,700 supported under the previous budget.

Fewer People to Receive Long-Term Help

Other housing assistance programs also see major reductions. Funding to help people transition from homelessness to stable housing would fall to $50.3 million, well below the $188.2 million requested. Long-term rental assistance would receive $87.4 million, compared to the governor’s request of $105.2 million. These cuts come at a time when the demand for stable housing remains high and the gap between rent and wages continues to grow.

Shelter Funding Stays Strong

Despite fears of possible shelter cuts, nearly $205 million would still go toward supporting homeless and emergency shelters. Though slightly below the $217 million requested by the governor, the funding would help keep shelter operations running across Oregon. Rep. Pam Marsh, chair of the House Committee on Housing and Homelessness, said the shelter dollars are critical for maintaining beds and providing an entry point into long-term housing solutions.

Housing Permits & Evictions Paint a Grim Picture

The proposed budget arrives amid troubling housing trends. Eviction filings in Oregon hit a record 27,290 last year, while housing construction slowed. Local governments issued fewer permits for the second year in a row, hitting a 12-year low. These numbers reflect ongoing issues with housing supply, affordability, and tenant protections, despite large past investments in housing initiatives.

Lawmakers Voice Frustration Over Progress

Some legislators, including Rep. Jami Cate, voiced concern over the pace of results from previous housing investments. She noted that many Oregonians are frustrated with the lack of visible outcomes, especially for wildfire survivors and others still waiting for aid. “It feels like we should be seeing a lot more results for the dollars we’re investing,” Cate said during the subcommittee discussion.

Budget Priorities Under Pressure

Governor Kotek and legislative leaders are juggling several funding needs, including education and behavioral health. The limited budget forces them to prioritize, and housing advocates fear eviction prevention has lost out. Democrats have described the budget as ambitious and focused on affordable housing and homelessness, but even some supporters admit it falls short of earlier promises and funding requests.

Advocates Warn of Rising Homelessness

Housing advocates, including the Oregon Law Center, warn that reducing eviction prevention funding could lead to more people entering homelessness. They argue that preventing eviction is the most cost-effective strategy, saving the state money in the long run by reducing pressure on emergency services and shelters. “People are living very close to the bone these days,” said Sybil Hebb of the Oregon Law Center. “Any unexpected expense or illness can push them into crisis.”

Final Budget Still in the Works

House Bill 5011 now moves to the Joint Committee on Ways and Means for further review. With only a few weeks left in the legislative session, lawmakers must decide how to adjust the budget in response to public feedback and economic realities. Governor Kotek is reviewing the proposal and is expected to push for additional funding before the session ends. As Oregon continues to face one of the most serious housing challenges in its history, the final decisions in this budget cycle will shape housing access and stability for years to come.